Early-stage venture capital company Cocoon Capital has announced the first close of its third fund, Cocoon Capital Fund III, securing $30m in commitments towards a target of $50m.
The new fund will continue the firm’s strategy of backing the region’s most promising enterprise and deep tech startups from the earliest stages, combining capital with hands-on support to help them scale globally.
In a region where investor returns are hard to come by, Cocoon Capital’s Fund I and Fund II are returning capital to investors. According to data insights firm Alternatives.pe, the second fund ranks among the top three performing VC funds in Southeast Asia by internal rate of return (IRR).
“We chose to avoid chasing the hype around consumer tech and the latest buzzwords like AI and blockchain,” said Michael Blakey, managing partner at Cocoon Capital.
“Instead, we are focusing on overlooked opportunities – founders solving hard, unsexy problems in enterprise infrastructure, advanced manufacturing, robotics, and healthcare. Fund III doubles down on that strategy. We’re not looking to build the biggest portfolio, we’re looking to build the most resilient and transformational one.”
Cocoon’s model is distinct from traditional early-stage investors. The firm leads every deal, takes a board seat, and implements a 10-step diligence process that evaluates governance, technical depth, founder aptitude, and product potential even at the seed stage. Its post-investment platform, known as Cocoon Academy, provides founders with access to governance playbooks, financial fundamentals, personal coaching, and a network of domain experts and follow-on investors. With a disciplined pace of up to five investments a year, the team remains deeply engaged with every portfolio company.
The fund will continue to target pre-seed and seed-stage investments in B2B software and deeptech startups across Southeast Asia, while selectively exploring opportunities across broader Asia and Australia. Cocoon plans to invest in 20 companies over the next four to five years. Roughly 55% of the fund is reserved for follow-on investments up to Series A, allowing the firm to maintain support for its strongest companies as they scale.
“The digital transformation of traditional industries in Southeast Asia is still in its infancy,” said Carol Cheung, partner at Cocoon Capital.
“We are especially excited about backing founders using technology to modernise sectors long underserved by innovation – whether that’s to optimise industrial processes, combat climate change, improve healthcare outcomes, or reshape financial infrastructure. These are long-term problems that require long-term partnerships, and that’s what Cocoon is built for.”
Deeptech companies such as Aprisium, which enables micron-level industrial contamination detection, and Augmentus, an industrial no-code robotics reprogramming platform now being used by manufacturers worldwide, exemplify how local startups are building globally competitive solutions. Other investments include TransTRACK, a fleet optimisation and logistics platform; BuyMed, one of Vietnam’s leading digital pharmaceutical distributors; and Shomvob, a Bangladesh-based job-tech platform improving access to employment and embedded financial services.
“These founders aren’t just building regional plays,” said Zongxi Sia, investment director.
“They’re solving universal problems with Southeast Asia as their launchpad. Whether it’s reducing emissions from manufacturing or improving access to healthcare, these companies are positioning themselves to scale globally from day one.”
“We’re building a fund that delivers more than returns,” added Blakey.
“We’re helping build companies that matter – companies that survive downturns, reshape industries, and set new standards for what innovation in this region can achieve.”
Cocoon Capital Fund III will remain open to new commitments until its final close, targeting $50m in total capital.
Jim Cornall is editor of Deeptech Digest and publisher at Ayr Coastal Media. He is an award-winning writer, editor, photographer, broadcaster, designer and author. Contact Jim here.
